In the past decade, Systematic Investor Funds (or SIP) have been synonymous with Indian investors. Despite the volatile nature of markets, there are many myths that prevent investors from investing in these funds. When investing in SIP, new investors may have many questions and doubts. It is a good idea to seek the advice of financial professionals in order to plan for long-term or short-term goals. These are the top myths about SIPs that can confuse new investors.
SIPs are only for small investors
One myth about SIP mutual funds states that they are only for small investors. These funds can accept large amounts of money, even though the minimum investment is Rs 500 or Rs 1000. The investors can invest in SIPs with Rs 5000, Rs 10000, or more. Both investments are the same, with NAV being issued in the names of investors for the respective months and the averaging of market costs month to month.
Do not start SIP when markets are high
We believe it is best not to invest in high-market markets. SIP NAV units can be bought against your investment. When the markets are high, there will be fewer units. However, when the markets fall, the units will be greater. This helps to manage market volatility effectively. Investors can now put their money into any SIP fund and can take advantage of market volatility.
SIP Investment Period cannot be changed
Investors are often misled about SIP’s duration. There is no set period that you can invest with. Most companies have a minimum 6 month investment period. The maximum amount depends on the personal or family plan you are working with. The fund’s rules and user discretion will determine if they can suspend or discontinue investment during the initial phase.
Lump sum Investment is not possible in SIP
Another misconception that new investors often have is that SIPs don’t allow lump sum investment. These funds offer investors the option to invest monthly, weekly or quarterly. They also allow for one-time investments. After reading the fund’s rules and regulations, the user can decide the amount they want to invest.
When it comes to investing, SIP in Mutual Funds is the best tool for saving money. These are the goals that should be considered by anyone who is considering SIP investment:
Retirement Investment – Everyone’s primary goal should be to retire. After all, no one earns enough money to cover their expenses. SIP mutual funds planning to retire in your earning years is therefore of paramount importance.
Wealthcare Securities is a top financial advisor in Delhi NCR. We have a proven track record of over 10 years of wealth generation for the future generations. Our team is made up of top market experts that will help you create a custom plan to build wealth and live a happy life. Get in touch with our financial specialists for expert advice and assistance.